Key facts
- Kobe Steel is considering overseas M&A, including in India, to expand gas compressor production.
- The company is investing about 3 billion yen to expand its plant at Kobelco Industrial Machinery India (KIMI).
- The expansion is projected to be completed in fiscal year 2027.
- New facilities for non-standard compressors will be installed at KIMI.
- KIMI was established in 2010 as a joint venture and became a wholly owned subsidiary of Kobe Steel in 2019.
- The Kobelco Machinery Global Capability Center was established in Chennai in January 2025.
Kobe Steel is exploring mergers and acquisitions in India as part of its strategy to bolster its gas compressor production and navigate challenges posed by a weak yen and high manufacturing costs. The company aims to enhance cost competitiveness and diversify its production bases by expanding into new markets, including India, the Middle East, and Africa.
In line with this strategy, Kobe Steel announced an investment of approximately 3 billion yen to expand its plant at Kobelco Industrial Machinery India (KIMI). This expansion, slated for completion in fiscal year 2027, will include new facilities for manufacturing non-standard compressors. These compressors are currently produced in Japan, the United States, China, and South Korea. By adding India to its manufacturing network, Kobe Steel seeks to mitigate country-specific risks and improve its market position.
KIMI, originally established in 2010 as L&T Kobelco Machinery Private Limited, became a wholly owned subsidiary of Kobe Steel in 2019. It currently manufactures tire and rubber machinery, such as rubber mixers and extruders, for the Indian market and surrounding regions. The expansion will also support the production of non-standard compressors, which are used in power plants and chemical plants.
Furthermore, Kobe Steel established the Kobelco Machinery Global Capability Center in Chennai in January 2025. This center, operating as a branch of KIMI, will focus on the design and development of tire and rubber machinery and non-standard compressors. These initiatives are part of Kobe Steel's Medium-Term Management Plan for fiscal years 2024 to 2026, which emphasizes strategic growth and transformation.